How much should I… be saving and investing?

Great question!  I like that question because it means that saving and investing are important to you.  GREAT!   First, let’s define the terms saving and investing.

Saving:  putting money away for an event or an item within the next 5 years


Investing:  putting money away for the future, 5 or more years away


With that said, let’s look at how much you should be saving.  As always, the answer to a question like this depends on where you are in life and in finances.  Let’s say you are

a.  in debt and/or living paycheck to paycheck:  save just enough to have a small emergency fund and then concentrate on getting out of debt.  You shouldn’t be doing any investing at this point.

b.  doing okay, just have a car payment and a few student loans:  You are still in debt, so get out of debt (everything except your mortgage), then save a 3-6 month emergency fund.

c.  just got out of debt!:  YEAY!  Good for you!  Now, before you begin investing, make sure you have saved an emergency fund of 3-6 months of expenses.

d.  I’m out of debt and I have my emergency fund:  Sweet!  You are really ready to start saving and investing.  This is the time when you can start saving for a car or house (remember, within 5 years is saving).  In addition to that, your goal should be to put 15% of your income into retirement investments.    Can’t afford 15% now?  That’s okay!  Do what you can with the goal of building to 15% as soon as you can.

How Much Should I….Spend on Food?

I get this question a lot!  And I always answer it the same way…  It depends!  (Don’t you hate that answer?)   To answer that question better, you’d need to look at:

a.  How many people are in your family?  Obviously, the more people in your family, the more you’ll spend on food.

b.  How tight is your budget?  (Assuming you have a budget.)  If you are deeply into debt, you just don’t have as much money to spend on anything, really.  So, you’ll be buying generic brands and you won’t be eating big ol’ steaks every night.  If you are debt free and have a good emergency fund in place, you have a bit more wiggle room at the grocery store.

c.  What kinds of food do you eat?  This question is very broad, but it basically comes down to this…  the healthier you eat, the more expensive it gets.  I wish the inverse were true, because then we’d all be so much thinner!  But, if you only eat organic foods, your grocery bill will be quite a bit higher.

d.  How often do you eat at home versus eating out?  Cooking at home can save a lot of money, and calories too!!!


To answer the question, though, I’ve seen a whole range of food budgets.  For a family of four, you can expect to see anywhere from $500-$1100/ month.  Wide range, huh?  In the end, you need to look at your own budget and your family’s needs to find the right amount to spend on food.


You can also check out this link from the USDA for food costs at the end of 2011.  It covers per person estimates and family of four estimates.  I thought it was interesting.